By Sarah Young
LONDON (Reuters) -Britain's Halfords Group (LON:HFD) cut its annual profit forecast on Wednesday, and warned there could be no profit growth next year as a result of weakening demand for bicycles, car products and tyres, sending its shares plunging.
The company said it was seeing "very challenging and exceptional short-term market conditions", and while it blamed wet, mild weather, it was cautious about a recovery.
The stock opened down 23% to 154 pence, hitting its lowest level since October 2022.
Falling sales at Halfords show the challenge retailers face from squeezed incomes for Britons, with the economy slipping into recession in the second half of last year.
Halfords said rain and warmer temperatures meant lower footfall in its shops and reduced sales of anti-freeze.
Motoring product sales volumes fell 5.1% in January compared to the same month last year, while cycle sale volumes were 8% lower and tyre sales were down by 4.3%.
Analysts at Peel Hunt (LON:PEEL) said it was positive that Halfords continued to take market share, but shoppers were wary.
"While our macro indicators for disposable income growth this year are all lit up green, which bodes well for spending power into the second half of 2024, consumers still remain cautious, shopping by need," they said.
For the financial year to March 29, Halfords said it expected underlying pretax profit of 35-40 million pounds ($51 million), a downgrade of at least 17% on the previous 48-53 million pound range given last month.
Profit in its 2025 financial year would be broadly in line with 2024 it said, another downgrade compared to a consensus forecast of 56 million pounds according to LSEG.
($1 = 0.7906 pounds)